With restaurants and most activities closed, many businesses shuttered or the employees sent to work at home, and governors’ stay-at-home orders, you may have a lot of extra time on your hands. Many people are taking stock of their own personal situations during this crisis.
Now is a good time to consider whether you need a new home, or perhaps it’s time to downsize from the ol’ family homestead. The real estate market was very strong heading into the COVID-19 pandemic and there is good reason to believe it will regain its strength when the crisis passes. It isn’t dormant, however. Real estate transactions can, and do, still take place today.
Let’s discuss some of the facts and a key measure of real estate success. Days on Market (DOM) is a term that you are likely to see thrown around in real estate, but what does it mean? DOM refers to the number of days a house has been listed on the Multiple Listing Service (MLS). Real Estate brokers, agents and third-party websites, such as Zillow and Trulia, all utilize the MLS to showcase their clients’ properties, research homes available on the market and keep track of pending and completed transactions.
Every day that a home stays on the market or “active” in the MLS, a new day is added to the DOM counter. To stop the counter, homes need to be taken off the market – meaning that a house goes under contract, and someone has committed in writing to buying that home. In a HOT real estate market such as Northern Virginia has been, the inventory of available homes is low, so the number of days a home spends on the market should be relatively short. The median days on market during the week of March 15-21 was five, down from six DOM the week before.
Despite physical distancing measures enacted because of COVID-19, there seems to be a steady stream of people. Some people may be hesitant to see houses right now, but it is possible to follow social distancing rules while viewing homes with a responsible agent.
The real estate market has begun to cool off due to the COVID-19 pandemic, and the long-term impact on the real estate market is uncertain. We may have seen a short-term peak in home prices, but in the long-term real estate prices typically rebound in due time.
Fortunately, we are not in the same position that we were 13 years ago during the previous housing “bubble” burst. These days, it is harder to qualify for a mortgage, homes have more equity, and steadily low-interest rates allow for a new batch of qualified buyers to be able to afford to enter the real estate market. Because of the low-interest rates, prices are at their highest, and I believe that we are headed into a plateau in that regard, as homes can only go so far up in value. But in the DC area, there is still pent-up demand for housing. Your best play in a precarious market is to make your move now, especially if you have built-up equity in your home.
Buying or selling in the real estate market is still possible during these uncertain times. Unlike in 2007, we now live in a digital age, and ingenuity has blossomed because of it. What once had to be trod physically to be known, can now be done virtually. Looking to buy? Tour a home without ever leaving your couch, sign all your documents electronically, and visit a prospective neighborhood without stepping foot outside of your car.
But what if you want to sell? Listing appointments can be done via Zoom, drone videos can be taken to showcase the topography of your property, and the plethora of social media options means more avenues are available to showcase your home to prospective buyers.
A great real estate agent can navigate the murky waters ahead. By utilizing all the available tools, we can get through these tough times together.
— “Where are we now, and where are we going?”, McEnearney blog